The FCC’s Wireless Telecommunications Bureau (WTB or Bureau) has released a report suggesting that certain “zero rated” services offered by AT&T and Verizon Wireless might violate the Commission’s Net Neutrality rules. Both Verizon and AT&T offer their customers access to affiliated services that are zero rated, that is, services that are exempt from the data caps that would otherwise apply. Although both Verizon and AT&T allow third parties to also obtain zero rating for their unaffiliated services by sponsoring (i.e., paying the carrier for) the data used by their customers, the Commission has raised concerns that the charges imposed pursuant to such sponsorship plans may exceed the carriers’ costs of providing the incremental amount of additional data required to obtain the zero rating. As a result, the Bureau fears that the carriers may be able to raise the costs of critical inputs to competing services in a manner that does not similarly impact the zero rated services offered by their own affiliates. It should be noted that T-Mobile also offers its own customers zero rated services but does not charge unaffiliated edge providers to obtain the zero rating and does not provide competing services through an affiliate. Accordingly, the Bureau indicated that T-Mobile’s zero rating policies did not raise the same competitive concerns as the policies of AT&T and Verizon.
